Have you been buying your customers?

Shouldn’t you be?

That’s the purpose of your “small business advertising” – to buy clients…

And they in turn pay you more than you paid for them…

So it counts as an investment…

We all agree on that, so how much are you really spending on your customers?

And what’s your Return on Investment (ROI) on that investment??

If you don’t know any of the answers, then trust me, many are in the same boat…

A lot of small business owners think they know, but have no actual hard data-based answers…

But they’re still in business right?

So it’s probably no big deal, right?

Well… That depends – on what you want to get out of your business??

A lot of small business owners are making less than mid-level management at medium to large businesses…

And they end up working a lot more…

Some have made it to 6-figure incomes…

And some have actually reached true wealth…

Personally, I view the latter group as financial and business successes…

Because even if you love what you do – why work 80 hours for 40 hour pay??

Don’t most of us launch our businesses with the hopes of enriching our lives?

If so, then maybe we should rethink how we spend money on advertising…

Find out how much each customer is costing you, because if you could greatly increase your profit, how much would you put into them?

Well, that’s the name of the game in small biz advertising…

Spend a buck this week and get back two next…

Rinse and repeat… and repeat… and repeat…

Until it stops working… Don’t quit while you’re ahead with your advertisement… Keep on using it while it works and measuring its response…

But I’m getting side-tracked now…

We have questions to answer…

Like your ROI on client acquisition costs.

There’s a couple things you need to track to measure your ROI…

The first thing you need to know is the break even point…

You could hurt your businesses cash flow if you don’t find this out…

But if you know that you break even – and get that ROI of 1 – within 7 days then you can plan ahead…

Unless it takes you 7 weeks to reach to break even, then you need to plan accordingly…

You understand…

So let’s start to improve on your ROI once you’ve learned of the time between your getting-client costs, and your current ROI…

There are only two way to improve the ROI on your marketing…

Incidentally, the two steps towards growing your businesses profits is to either lower costs or increase income…

To lower costs you could acquire customers cheaper by finding better deals on your advertising, or trying a different and cheaper way to advertise…

Lowering costs will improve your ROI, but not by much…

Because eventually you’re going to get to zero if you lower your costs for too long…

But who cares if you’re gaining an ROI of 1,000% on every dollar?

Well at the end of the day we’re all as small business owners asking the same question, how much can I put in my pocket?

So don’t focus on your ROI or net profits.

If you go the second route towards improving your ROI, then you kill two birds with one stone - improved ROI and increased net profit…

The second method being to increase income from each new client…

There are two ways to do this:

# Increase the transaction size for each client
# Increase the frequency of client purchases

To raise your transaction size, you could raise your prices, sell add-ons along with your product, or offer premium versions of your product or service…

By joint venturing to provide some added new products or services, or by adding continuity to your business (memberships, subscriptions, etc.) you can quickly increase the frequecy of your client’s purchases…

Utilizing just one of these methods within the next month will show an immediate increase in profits…

Remember, success and failure for small business depends solely on the implementation of a good plan…

Most falling or soon to fail businesses are ran by owners that have the dream, but no will to execute it…

Don’t be that business owner…

Take what you are learning here and implement it – then share your success story with me so I can publish it on the blog…

Feel free to leave any questions or comments as always…

Here’s to always improving small business advertising!!!

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This entry was posted on Saturday, March 6th, 2010 at 5:41 am and is filed under Marketing and Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.